Going, going - reversing course on lapsing donors

publication date: Jan 29, 2019
 | 
author/source: Matthew Dubins, Sharron Batsch, Susan Mullin, Andrew Olsen, Isabel Perez-Doherty, Jeremy Reis, Zach Shefska, Rob Tonus, Gregory Warner, Ken Wyman Edited by Ann Rosenfield

Recently, Hilborn author Matthew Dubins asked a great question about lapsing donors. This led to a spirited and useful conversation which has been lightly edited for clarity.

Matthew asked "If someone credibly tells you that a subset of your active annual giving donors has a high chance of lapsing, what do you do next?

Is there something you'd try to make sure that the prediction doesn't become a reality?"

Rob Tonus noted "In my experience, lapsing happens for three reasons:

1. They were never your donors. Those who give to a charity at “arm’s length” – either by supporting a friend who participates in an event or in memory of someone who has passed away – don’t have an affiliation to your cause. The only reason they gave was because their friend asked them to (or in honour of someone they admire). Converting these people is almost impossible, as the people who manage hospital lotteries know.

2. They were your donors, but you didn’t treat them well. Stewardship has to be immediate. They need to be acknowledged for their donation as quickly as possible. Emails they receive for donating online are good, but what are your other stewardship efforts? Do you call them? What size of gift generates a call? How quickly do those who give cash or cheques receive thank you letters? Sure, we’re all extremely busy, but wouldn’t it be great to have an army of volunteers calling EVERY donor? If people feel appreciated, they’ll certainly consider giving again, even if they’re the kind of donor who gave in Example 1.

3. You treat them like ATMs. Do you send correspondence without an ask? Donors want to know how their gift made an impact, even if it’s only $20. Tell them regularly how you made people’s lives better, and when an ask comes (not monthly - just a few times a year)!many will want to help you help others.

Soooo... How do you do all this? By working with program staff and communications professionals - yours or consultants or skilled volunteers - to tell stories of impact. Not just words, but video. Donors want to hear real life stories of how THEY and others like them made a difference. And by having the budget to communicate regularly to most people. That’s always a challenge. One I’ve always had." 

Ken Wyman added "One of the best ways to re-engage people who are lapsing is to address that. Typically this begins with a LYBNT letter (Last Year But Not This), noting that they gave last year but not this, and restressing the urgent need challenging the life of a beneficiary that their contribution could fix.

"Normally this would be followed by SYBNT (Some Years But Not This). You could jump immediately to what is usually the last letter in the series: WHYFU (Why Have You Foresaken Us?). In this, you extol the donor's virtuous commitment and the results achieved, and ask for feedback. Include a BRE and note. Is there something we have done? Has there been a change in your life, such as retirement, under or unemployment, or new expenses? Would you like to continue to receive our newsletter? Consider a bequest?

"The WHYFU typically results in a bump in gifts, as well as many notes helpfully explaining why they have not given. Sometimes this can be set back on track with an apology or a change in procedure."

Ken then asked "If the expectation that they may lapse is based on predictive analytics, what are the underlying assumptions? What pattern of behaviour suggests that these donors are in danger of lapsing?"

Matthew Dubins replied "This would vary from one non-profit to the next. I could look at things like (in no particular order):

-appeal of acquisition,

-size of first gift"

Sharron Batsch commented " I think treating your donors as customers works. Several suggested a phone call which I applaud. How many of the respondents have received a thank you from an ED, board member or fundraiser? I have had exactly one call when it was just thanks, but it ended up on our home voice mail. No points for that also no future engagement.

This past summer we received a somewhat gooey call from a group we have supported for a very long time. It must have been a call centre because as they were asking for more, I asked if they knew when we first started our support. Dead silence at the other end. Donors are not stupid, a little respect and sincere appreciation goes a long way. A real person saying thank you and asking how you are is priceless. And maybe helps continue their support.

Yes ... treating your donor customers like you appreciate being treated has great value. Just a conversation and maybe a question or two to better understand why they have continued to give. There are many motivations and it may be something as simple as 'because I believe in what you do!" Cheers!!

Ken Wyman then noted, "What makes this person think they may lapse? My first question is to examine the evidence. I've had board members say that "lots of donors are angry and won't give" and when pressed, admit it was only one or two complaints. Take it seriously but don't drop high priority tasks without understanding the problem."

Matthew Dubins replied "Predictive analytics is what I would call credible evidence. This is something that I've seen work *very* well." 

Isabel Perez-Doherty noted "Depending on the size of the subset and resources the first action to take is to reinforce stewardship actions and, if it’s small enough, bring on a thank-a-thon effort (phone calls) with a few questions in mind to understand future behaviour from the source and also try to re-engage them. If the subset is large and resources are at hand test different layers of reactivation and continue building analytics from the results."

Susan Mullin added "I know what I'd love to do, reach out at the highest level of engagement you can afford depending on the size of this group of donors and for the reasons upon which you've based the assumption of "soon to lapse".

Let's assume that they are not donors who are truly one-time, such as those who might have given as a memorial gift but are not connected to the cause. For instance, I would not invest a lot of resource on those who are outside of the catchment area for your charity and have no other known connection to the cause or, are donors from a P2P campaign who have also only one gift to you.

Study your data to understand your trends and put measures in place that anticipate these moments. Let's say that you have a high percentage drop off of monthly donors between the 10 and 14 month mark. Can you put a calling program in place at the 9-month mark to steward these donors and share stories of impact they've helped achieve? Or, ask them about their experience as a donor with an online donor survey - and follow up with what you heard. We work so hard to inspire people to invest in the work of our organizations, we need to make sure they understand their impact!"

Matthew Dubins said "Priceless comment. I really like the idea of investing only in those donors who had an actual connection vs one and done "arm's length" donors." 

Gregory Warner  commented " The best way to deal with this is to GIVE the supporter a meaningful OFFER for ENGAGEMENT/involvement that ALIGNS well with THEIR particular interests, passions, and needs... with NO ASK whatsoever. Always remember... the law of reciprocity is powerful.

Now, having said that, if you don't know what their interests, passions, and needs are? Well, then I believe you really didn't deserve a donation from that supporter after all anyway. It's got to be fair. A win-win.

We're dealing with real people, not stats and donor id numbers. Treating people like ATMs or worse is why donor retention rates among nonprofits suck. Give to them in line with what they want and where they reside in the consideration process and everyone will benefit. Hit 'em with more SPAM and everyone loses. Unfortunately too many nonprofits are good at taking and asking... but really bad at giving." 

Andrew Olsen agreed, saying "True. In fact, with high value lapsed donors we’ve found that a live thank you call can increase reactivation rates very well." 

Jeremy Reis  added "For a large number of donors, you can use technology like ringless voicemail to deliver a "thank you" or an engagement message to a high number of people at low cost. We've tested this and it's an effective tool to retain donors."

You What do you think? Any insights? New ideas? Different point of view? Add your ideas below.

To read more on this topic, check out Zach Shefska's impactful blog from a very personal perspective on this question .

Sharron Batsch is the Developer of @EASE Fund Development Software and author of From CHAOS to CONTROL for NPOs.

Matthew Dubins is an Author and the Founder of Donor Science Consulting

Susan Mullin is President and CEO at Southlake Regional Health Centre Foundation

Andrew Olsen, CFRE is the Host of Rainmaker Fundraising Podcast,  SVP at NEWPORT ONE

Isabel Perez-Doherty is the Manager of Philanthropy and Strategic Impact at YWCA Canada

Jeremy Reis is Sr. Director of Marketing at Food for the Hungry

Zach Shefska is the COO at MarketSmart

Gregory Warner is the CEO of MarketSmart.

Ken Wyman is a Fundraising Consultant and Professor of Fundraising Management at Humber College

Ann Rosenfield (Editor) is the Editor of Hilborn Charity eNews and data nerd.



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